Adios 2010, sayonara, salaam, lehit, au revoir, ciao. There aren’t enough ways to say goodbye to 2010. It was a tough year for America, and for much of the world. Speaking for myself, professionally, 2010 was a year I’ll never forget. Truth be told, I’ve been thinking about this blog post for some time now. I’ve fantasized about addressing the entrepreneurial challenges I faced in 2010, facing of a severely depressed economy, an increasingly crowded local search segment, a handful of souring investor relationships, among other disappointments. But I’ve changed my mind. I’m going to spare you, my reader, from my bitching and from some opportunistic ‘lessons learned’ and drop my weapon so as to not injure anyone. Instead, I’ll end this year’s blogging, this decade’s blogging, by closing the chapter on a decade and an era I’m most grateful for.

As some of you likely know, it was announced in early December that CitySquares was sold to Backyard, a west coast based startup with funding from Google CEO Eric Schmidt, celebrity entrepreneur and investor Jason Calacanis, and self described greedy, blood-sucking venture capitalist Dave McClure. It’s not the investors that make Backyard exciting, to me anyway (although it certainly has a nice ring to it), it’s the founder and CEO Steve Espinosa. I’ve known Steve for a few years now, and at 22 he’s already a very well admired veteran of the Local space and I’d bet on him any day of the week. So it’s an honor to have sold CitySquares to such a great guy with an equally great vision.

Now that CitySquares is largely behind me (I will still be involved as an advisor), I’m moving on from Local. Plainly put, 2010 kicked my ass, and CitySquares’ prospects for regaining its edge wasn’t getting any brighter as this year passed for reasons I won’t get into right now (but I will once the dust settles). As Greg Sterling penned on his site announcing the acquisition of CitySquares,

Given the noise and competition now in local Saren is not unahppy about exiting the segment for now…When CitySquares launched, for example, there was no Google Places, no Facebook Deals, no Groupon and no Foursquare (et al).

There’s a whole lot of truth in those two sentences. More truth than you know. I can proudly say that CitySquares pioneered hyper-local search. No one was doing local search at the neighborhood level until CitySquares came along – and I mean really doing it at the neighborhood level. And to this day, I will boldly state that still, no one has the mashup of hyper-local geospatial data and local business listings that CitySquares.com has. Alas, the mobile platform is the future of local search, of hyper-local search. OK, it’s not the future, it’s the now! So of the many things I can hang my hat on as I close the door on my CitySquares.com chapter, this is one of them.

Another thing I can hang my hat on are my relationships with countless people, of so many background, cultures, and talents. I’m proud to call many entrepreneurs, investors, employees, associates, vendors, partners, across the country and in many corners of the globe colleagues, acquaintances, even friends. CitySquares took me places I never imagined going, both literally and figuratively. I’m most proud of this.

So it’s with both excitement and with sadness that I say goodbye to 2010, and with open arms that I welcome 2011. I will be making an announcement about my next step within the next week or two. In short, it’s a big change for me, and a change I’m thrilled about.

Before I sign off for the year, I’d like to wish you a very healthy, happy, prosperous 2011. See you on the other side!

The Kelsey Group is like the ESPN of the local search and advertising world. They’re the authority. They host about four major conferences every year, attracting industry insiders from around the globe. Their next one is next week in San Diego, called MARKETPLACES 2010: THE LOCAL VERTICAL OPPORTUNITY. It’s the who’s-who and that what’s-what of local and vertical solutions and advertising. I’ve attended numerous Kelsey shows and have come to know the Kelsey staff as warm and generous professionals, and many of the conference regulars. The Kelsey Group and their conferences have been absolutely critical for CitySquares. If it wasn’t for them and their shows, I don’t think we’d be a player on this big and competitive field.

I was asked to speak at the Marketplaces show alongside Colin Pape with ShopCity and David Vazdauskas of Local Thunder. The panel will be moderated by Steve Marshall, who I always enjoy. He doesnt pull punches and he adds a certain kind of intensity to the panels. I’m looking forward to it.

I’ll be at the show from Sunday through Wednesday with my colleague and VP National Sales Todd Salerno. We have a few meetings teed up but if you’d like to catch up with one of us just email me, tweet me or send smoke signals, whatever works for ya!

If anyone wants to go, but does not yet have tickets, please get in touch with me, I have a discount code for you to save a little.

2009, you sucked! Good riddance to you! That was a horrible year that I just get sick thinking about. As it pertains business matters, it all started in late 2008, the second half of September to be precise, when the economy tanked. The entire country panicked, and the global economy didn’t respond any better. It really was the Global Economic Crisis, and as NPR is now reporting apparently it’s been “abated” but the effects are to linger for quite some time. One thing is certain, CitySquares was affected greatly and quite immediately. I won’t go into the details and the describe the punches we took, those we handed out, and the battle scars we have to show for it, but I will highlight some of the challenges and battles that really stand out in my mind:

As soon as the hard times hit I saw an immediate response by the staff at CitySquares. For the most part, the team held together and today we’re tighter and stronger for it. Like a tribe, we stuck together and hunkered down while battles and storms happened all around us. We were not well fortified but we survived and now we’re about to thrive! On the other side of the coin, a couple of our tribesmen demonstrated an inability to persevere and overcome these challenges, and some weaknesses were exposed and ultimately eliminated. Thankfully that ended rather quickly and the tribe was/is better for it.

Small businesses, specifically brick and mortars and mom-and-pops, got their asses kicked much like we did. Those who hadn’t yet learned to fly unfortunately fell from the nest and met their demise in ways that were hard to watch. Balances went unpaid, phones disconnected, and personal stories of financial tragedy were common. It was truly heartbreaking to see. Yet many also survived and are resurfacing with tougher skins and stronger businesses!

Beyond the staff at CitySquares I also experienced something completely new and foreign to me – board members and shareholders reacting in different ways. The vast majority of them demonstrated a wisdom and calmness that really impressed me and taught me a whole lot about pragmatism and experience. That, however, was not always the case. In a couple of isolated incidents I witnessed naked panic, fear, and fright and this came from the worst places possible in the corporate structure. I will not divulge the details not for lack of transparency but for reasons of respect and professionalism – that is a fine balance you know! As a result of these panicked and frightened reactions it was apparent to me that something had to change and change immediately or the company was destined to collapse for unacceptable reasons. It’s one thing to fail because a business model fails, or because of timing or market and/or economic reasons, but its another to fail because of human emotions, poor judgement, and failure to communicate and work as a team. At the end of the day, however, our shareholders demonstrated their commitments to the company but continuing to support us financially and through other supportive means. Again, we are now better for it!

As a leader I learned so many lessons in the past 12+ months, but two in particular that I will not ever forget. For the sake of brevity there were a few incidents in the first half of 2009 when I lost control of my emotions and let anger and fear win. These incidents are not something I care to revisit in detail and am embarrassed to detail. I have made amends in both instances. These two cases taught me some huge lessons, lessons that took me months to truly understand and apply to life and work.

In a tribal organization like ours, loyalty, communication, and teamwork are absolutely vital. What became incredibly apparent to me was how strong the tribe is when communication is at its best, when leadership is performing in the right ways, and when the tribesmen are truly committed to each other and to the tribe’s visions and beliefs. There is something almost dogmatic about a small company! I saw people step up to the plate in the most amazing ways. It’s still happening today. People are not willing to settle for less, nor willing to sit back and be OK with the way things are or may be heading, they expect more from themselves, from the others, and from the tribe as a whole. There is much of this happening right now, as it should always be! A sort of shuffling is happening internally, and its happening in a way that is uniting the tribe only more and making the company better and more focused and determined than ever before.

These points are the major ones that stand out for me, as an entrepreneur and as the chief of the tribe. There’s lots of business related stuff too, like how we got through the last 15 months, and what changes we made to our business/model/execution, etc. And those things are continuing to happen, but the reality is this: CitySquares is stronger, more successful, and closer to our goals than ever before! Its because of the above points, among lots of others, that we are here today.

A few of my entrepreneurial goals for 2010 are as follows, and I will soon be blogging about these things:

Continue to grow and mature as an entrepreneur, as a CEO, and a tribal chief. How? Continue to identify and improve those leadership traits where I am weakest, and harness and cultivate those where I am strongest. I cannot do this alone either, I need my tribe to help me, I need to read and learn more, talk less, say more, listen more.

Blog here more often, with transparency, and with purpose.

Create and participate more in entrepreneurial circles, networks, and communities (e.g., The Founder’s Quandary)

I am still working on these ideas and a couple others. I will be blogging again here very shortly. Stay tuned for more!

2010 is going to be an extremely good year for CitySquares. No doubt we still have lots of lessons to learn and battles to fight, that’s par for the course. But if we can survive and unite the way we did in 2009, than 2010 is really going to be something else!

Happy new year to you all, may your 2010 be filled with new found freedom, with health, and prosperity.

When I look back at the entrepreneur I was four years ago and compare that guy to the entrepreneur I am today, I see two very different people. The entrepreneur in 2005 was much more naive and immature. I was so much more of an idealist, so much more pie-eyed, and I had a sharp tongue and quick trigger-finger that I had a hard time controlling. I’m still an idealist, I’m still pie-eyed, and I’m still naive and probably still a bit immature, but today I’m much more rooted, more grounded, more focused, and much more thoughtful about how I communicate and how I handle stress. That’s been a real battle for me – balancing life, making sure that my work does not define me, and hence dominate me.

So much has changed in the local search arena too. When we started many of the players we hear about today were as small as we were. Citysearch was really the only major player. We hardly knew what we were stepping into and local search is a more crowded and competitive space than I ever anticipated, and rightfully so, the market opportunity is massive. That kind of competitive environment has only kept our edges sharp and kept our eyes keenly focused.

The business itself has matured in many ways yet the model itself is still largely intact. That’s a real testament to the market opportunity and do our original business model. While the economy has presented a number of substantial challenges, we’ve been able to navigate our way through the choppy waters and in some ways its actually helped us sharpen our tools. It took us a few years to understand a number of the most fundamental parts of our business model and test them, and now, through some amazing partnerships and alliances we’re about to unleash some powerful solutions to a core problem in the marketplace.

Some of our identity changed over the past four years too. Unfortunately, as a small business with limited resources, there are only so many things we can accomplish. Our heart is big here at CitySquares, and we want to do so many things, want to give and contribute so much to society. If we were a non-profit, we could focus all of our time on these things, but we’re not – we’re a business. We’re in business for a reason, to tackle the market, solve a problem, deliver value for our customers, and along the way make money and provide a return for our investors. It’s not complicated, but realizing that took some time. I look forward to returning to those ideals at some point, be it through CitySquares or other channels.

My partnership with Bob has grown so much, and it’s just been awesome to watch him grow as a professional in parallel to my growth. Bob has stepped up, challenged himself, and done so through some very difficult circumstances. Not only has my partnership with Bob grown and blossomed into a very solid and loyal one, but our friendship has strengthened immensely. We may not hang out as much as we both would like but we don’t need to. I see Bob more than I see my own wife, and our friendship is evident to those who work with us and evident in our ability to work together through thick and thin.

I’ve also had the pleasure of seeing my colleagues grow as people, as life inevitably happens, and see them grow as professionals. Start-up life is not for everyone! That’s a fact! People who I work alongside, like Justin, Kim, Michael, Amber have proven themselves not just as contributors to the business and the company, but as loyal companions who continue to illustrate every day what tenacity and perseverance is about. They are the embodiment of these characteristics. They’ve also become friends and I’m so proud of them, and I’m excited to work with them in the months and years to come, and be able to provide for them and support them as they grow.

I’d like to point out some of the folks who’ve joined the team, stuck it out, and supported us in any number of ways. These people are not all necessarily employees, they’re friends to CitySquares too and their contributions to the company and the business have just been awesome. These folks continue to support us. The list is long, they know who they are. I’m not sure that this anniversary merits thanking them publicly, not quite yet – that day will come, I’m sure of it.

Along the way over the past four years we’ve made friends in the business too, with competitors, industry experts, vendors, service providers, consultants, press and media, and fellow startups and entrepreneurs. They’ve all added to the fun and the experience of CitySquares. Along the way we’ve also seen companies fail to succeed, entrepreneurs see their dreams crushed, and see the underbelly of entrepreneurship, startup life, and even see unethical behaviors by people and companies. These things have all taught us, made us stronger, and made us wiser. No different than a person going through life – learning lessons and becoming wiser in the process.

We’ve made mistakes, of course. I’ve made mistakes, no doubt. But today, on our 4th anniversary I can proudly admit that we’re doing something right. It takes a team to make that happen. No one person is responsible – everyone and everything listed above, and more, is just one of the puzzle.

So while an anniversary such as today’s is special, its just a milestone. There’s still so much work to be done. We can celebrate briefly, but the work continues. Every day is another day in the trenches and we need to advance our lines.

Onward and upward we climb, into our fifth year, heads held high, humbled, courageous, wiser, and focused more than ever.

Ah, decisions decisions. They never end in life, unless you just decide to spend your life as a lump on a log. But even then you still have to make decisions, starting with “I’m going to be a lump on a log.” If, however, you’ve chosen a life beyond lumping on a log, your life is full of decisions. Every day we’re faced with them:

Should I get out of bed?
Should I eat?
Should I wear the wrinkled shirt?
Should I get gas?

Those are routine daily decisions that we all have to make, and there’s nothing exciting or risky about them – we all make them. We’re not paralyzed by them, unless we suffer from a disorder, as some do.

There are other decisions that are far more important, that we don’t face every day, decisions that affect our lives and the lives of those around us. Decisions like…

Should I marry her?
Should I have children?
Should I buy this house?Should I get that operation?
Should my child get that operation?

People who are in business for themselves, whether they’re a self-employed contractor doing roof work around town, or an MIT scientist who discovers a new vaccine, face a whole different set of decisions. These entrepreneurs make a huge decision once they decide to go into business. Some decisions entrepreneurs face…

Should I start my own business?
How do I get my first customer?
Can I afford to pay a staff?
Can I afford to pay myself?
Do I really have a business here?
Can I make money?
Should I raise money?
Should I incorporate?
Should I trade equity for money?
How much control do I give up?
Should I keep doing this?
Should I fire this person?
Should we expand the business?
Can I keep doing this?

The list goes on and on. These decisions have a way of putting an abnormal amount of stress on an entrepreneur because they’re piled on top of the routine/daily decisions, the big life changing decisions, and yet at the same time an entrepreneurs decisions affect herself, her spouse, her children, her family, her social life, her employees, her partners, her customers, her investors, shareholders, board members, etc. There are more people who have a stake in an entrepreneur’s decisions than one might first realize. It’s facing those decisions every day that partly define an entrepreneur. Some are good at these decisions, some aren’t. Some can make these decisions with little help, others need lots of help.

The hardest decisions I’ve faced as an entrepreneur have been the ones that affect individual people – like having to lay someone off, or fire them. There is just no way around it – it hurts the entrepreneur, the employee, and those around the employee.

Recently I faced another hard decision. This one pertained the direction of my company and pertaining those who were at the helm with me. You might say that I was at a point where I felt like my number of options were becoming more and more limited. And for an entrepreneur like me, who’s a fast decision maker after a quick risk/reward assessment, there’s nothing worse than being out of options.

Over the last few months I’ve had to face a reality that was hard to come to terms with – that the company that I’ve built with Bob over the last four years, that I’ve put so much of myself into, was slipping from my grip. I was not pleased with the direction it was going and my vision for the company was moving towards my periphery instead of where it had always been – straight in front of me. Something had to change, and some decisions needed to be made. Others agreed.

Ah, decisions decisions. They can halt you in your tracks. Some people can go their whole lives regretting one decision, and it becomes something of a curse. I knew I was at one of these splits in the road but I couldn’t be hasty. This decision required a lot of thought, and it required a lot of smaller decisions along the way, like playing a game of chess or poker.

A couple of weeks ago, the decision was made and almost immediate effect at many levels. And at the risk of being secretive, but in light of the fact that this decision was a sensitive one, I’m unable to explain what the decision actually was. It’d be inappropriate of me. Also, not knowing the ultimate outcome yet, it’d be reckless. But what it pertains is the very course that CitySquares takes in the near future and long term future. It’s the difference between surviving and thriving. It’s the difference between growth and prosperity or slowly suffocating. It’s about change. And change starts at the top.

Sometimes you don’t know if your decision was the right one for quite a while, and sometimes you know instantly. Sometimes you can go back and change your decision, other times they’re finite. This one was finite.

I learned something during this process, and it was something that I knew but hearing it from one of my investors, hearing him articulate it, and having him look straight into my eyes while saying it, really drove it home. What I learned was this: I am the founder of this company. While I have shareholders and a board of directors, it’s me and my vision that the investors bought into. It’s my passion, my knowledge of the space, my guts and gusto, my vision that got us this far. And if I believe in myself at least as much as my investors believe in me, then I must have an equal amount of conviction and gusto when presented with decisions that do not align with my vision and strategy of the business.

At the end of the day, when I have to rest my head on my pillow, I have to be able to say “I made the right decisions today.” Not making the right decisions, and not making them in timely manner, is the difference between sleeping well and not sleeping well – the difference between doing right by my own Self, doing right by those that trust me (from investors and shareholders to staff and customers) and one day living with regret.

I’m extremely pleased with my decision so far, and I’m proud that I turned this corner as an entrepreneur. Time will tell if they were the right decisions, but I refuse to be a lump on log and let others make them for me.

I’m posting this blog entry in two ways – video and the usual text blog entry. I thought I’d try this out and see how it goes. Please let me know your thoughts on all this, I’d love to hear from ya. Video is below, followed by the text.

[viddler id-2b584a47 h-370 w-437]

No doubt life is full of challenges, pain, suffering, obstacles – and all those things define who you really are. It’s not the good times that define you, shape your character, and test you, it’s the hard times, the darkest days.

This recession is doing exactly that to millions of people, if not billions. It’s global, and everyone is being affected – every day citizens, worker bees, small businesses, entrepreneurs, investors – no one is safe from this. And if you are not feeling the pain, than either you’re clueless and not paying attention, or you own a pawn shop.

CitySquares has felt the pain, pretty substantially. It started in the second half of September 2009, when the stock markets took a nosedive in the worst way. Our Q3 pipeline was a hefty one, and we were just on the verge of closing tens of thousands of dollars in new business. When the economy began collapsing, our pipeline just fell out from underneath us. It was pretty ugly. The first thing we noticed was the immediate and extreme reaction that everyone had to the economic downturn, but for us it was the small businesses that really highlighted the severity of things. They reacted as human beings, as real people – they reacted emotionally. So, over the next few weeks and into the holiday season we observed small businesses all across the country go totally radio silent. But what were they doing, aside from freaking out? They were trying to secure credit lines to pay their bills, trying to make payroll, keep their lights on. And all this right when the credit market was seizing up – no money for them. Then the holiday season showed up, and what do you have but small businesses with overstocked stock rooms, shelves loaded up with product that over the course of the weeks preceding the holiday season stayed that way. Now how are these businesses supposed to pay their vendors for those inventory orders? They weren’t able to move any product – and they’re stuck with all this inventory. Now it’s January and the invoices start showing up.

Then it really got ugly for them. They started shutting their doors, turning their lights off, letting their employees go. All those businesses, those local merchants, who give so much of themselves to their businesses – closing their doors for the last time. It was painful for us to watch. And we too, felt the pain. Those local merchants, they’re our customers. So we got hurt pretty badly too.

Well, here it is now, July 2009, and the economy still sucks. But small businesses are a resilient bunch, somehow. Lots of them managed to get through that long rough patch, and the fog seems to be clearing up a bit. Although unemployment continues to climb, and consumer spending continues to fall, those small businesses that weren’t really going to make it to begin with seem to have fallen off the tree like dead leaves. Perhaps there was a bit of a shakeout, a necessary one? I’m not a data analyst, nor do I desire to be, but from our standpoint at CitySquares, we’re seeing a bit of a lull here – less businesses shutting their doors, and more businesses just hanging in there, maintaining, and even others that are wising up to online advertising (perhaps the subject for another blog entry).

Well, here’s my point of all this. CitySquares is not unlike small businesses. We are not loaded with cash. Yes, we raised money in 2007 and again in 2008, and sure that included some big name investors like Mark Cuban and Jonathan Kraft. But we’ve never been interested in raising a boat load of cash – for lots of good reasons. And because of that we are learning some really valuable lessons. You might even gather from this that because we’re not swimming in capital that we’re learning some lessons that others may not – what its like to really be lean, mean, and hungry. Just like in 2005 and 2006, when we were bootstrapping our business, we were forced to be really damn smart about how we executed on our strategy, and how we tested business model ideas. Here we are now, three years later, basically going through the same process.

CitySquares had to make some cost reductions, and that included lots of things, from renegotiating with vendors, to trimming the fat off our budget, and the worst part of all, reducing headcount. I can’t tell you the pain that I’ve felt having to do that last part – letting people go. It’s caused me more stress, sleepless nights, and soul searching than perhaps anything else in my professional life. It wasn’t the first time I’ve had to let people go and it won’t be the last. One thing is for sure – it never gets easier.

Today, like the small businesses all across the country, CitySquares is running very lean, and running a tight ship. We learned some very valuable lessons over the past couple of years, and I also learned some valuable lessons.

It’s actually pretty fascinating to see how people react and handle these kinds of stresses. This is when you really see who people really are, beneath the facade. Investors, board members, employees, vendors, partners, friends and enemies – you see their true nature during tough times. I can tell you straight up that there are some folks involved in CitySquares that have demonstrated their strength, their will to persevere, their guts, and those are the people that I want to surround myself with. Then there are others, who have demonstrated their lack of heart, passion, wisdom, their lack of leadership. Those are the people that I would prefer to be in the other lifeboat. Those people really scare me, those are the people that cause the plane to go down, the ones that will press the self-destruct button.

But perhaps most intriguing to me is how stressful times can inspire people to do great things, and with ease and control. In times like these you not only witness the strength in strong people, but the ability to dust off and not just get back in the race, but run to the front of the pack. Human beings are really damn good at surviving.

When people say, “hey ya know, it can’t get much worse that this right!” I always find myself responding quite quickly in saying, “Are you kidding me? Of course it can. It can get a lot worse!” And that’s not a way of suggesting that – oh no we need to head for the hills! Rather, it’s a way of saying – look, things can always get worse. You don’t know the bottom until after you’ve been there. So just prepare for the worst, get ready for it, but meanwhile work hard to make things better. You can always fall down another rung on the ladder. And ya know, in my personal experience, the ladder is pretty much bottomless. The higher you climb, the harder you fall. The idea is that hopefully you only fall a couple rungs, and not the whole damn way down.

Alright, well I’m speaking in tongue again. But I think I’ve made my point, but just in case I’ll sum it up this way…

Entrepreneurs: Things can always get worse. And rest assured that things will get worse. Maybe not today, maybe not tomorrow, but some day, things will get worse. Don’t ever think that you’re insulated somehow. That’ll be your downfall. Instead of looking down and kicking the dirt, or crawling around your cave looking for a better source of fire, get outside the cave and listen to the wind – watch the tides – look at what the animals are doing – look at the horizon – the signs are all around you. Go with the tide, go with the wind, go where the horizon is sunniest. Follow the momentum that is around you.

For CitySquares, that means we’re getting back to some basic concepts and focusing a whole lot less on complexity, and entirely on core value. We’re done listening to the weak ones, the ones who’ve never really been there or done that. We’re watching the horizon, listening to the wind, and steering our boat to go with the tides.

Today CitySquares got a voicemail from Merchant Circle.It’s not the first time either. Usually I just roll my eyes, shout something out to whoever is nearby for a laugh, and I move on. In fact, just about anything Merchant Circle does gets a similar reaction from me: roll of the eyes, wise-ass remark, laughter, move on. Always in that order too. For those of you who may not understand my response – it’s because CitySquares, my company, and Merchant Circle are direct competitors.

Today, though, I am in rare form. I think it’s all the cold and flu medicine I’m doped up on. The voicemail came through as a wav file, as they all do, and I decided to play it over the speakers in the office for everyone to hear. We all laughed. But I wasn’t done.

So I decided take full advantage of this opportunity today. They called me, for the third time, and this time I responded. I went to their site, I claimed my listing, and voila CitySquares.com now has a profile in Merchant Circle’s directory. Actually, it seems we’ve had a profile there for some time, I just had to claim it. The address they had for us was three years old and it was a little tricky figuring out how to change it, but we figured it out.

Ya know I gotta say too, I was very impressed with the process! The obnoxious, spammy phone calls aside, claiming my profile and spicing it up was actually a very painless and enjoyable experience. In fact, we really should emulate some of it. But that’s all we’ll emulate, that’s for sure.

Anyone wanna place bets on how long it takes for them to take this down?

This week ADP stated that 693,000 jobs had been lost in the month of December, and the U.S. Department of Labor stated this morning that unemployment has reached 7.2%, a 15-year high. Those are some gigantic numbers – terrifying actually. And the Fed says it’s only going to get worse this quarter, and potentially longer. Is it any surprise? Americans have been spending spending spending for years now, piling up debt, and living their lives on a credit score. Is it because of deregulation? Who knows. The fact of the matter now is that we’re now paying dearly for this recklessness in the form of job losses, bankruptcies, foreclosures, homelessness, and much more to come.

Everyone needs to smarten up, fast. Individuals, companies, no one is excluded fro this. If you weren’t aware of this a few months ago, in late Q3, you better damn well wake up! I was shocked the other day to learn that a friend of mine is actually quite clueless about all this. He’s a bit insulated from it where he lives and in his line of work, but no one is really insulated from this. My wife works at Harvard University, which recently saw its endowment cut substantially, losing 8% or $12B. For the first time in a long time, people are losing their jobs at Harvard, seeing their pay cut, seeing bonuses and scheduled raises off the schedule. Harvard, one of the most stable employers in Massachusetts, is having these kinds of problems. Again – no one is insulated.

This applies to startups too, of course. In fact, I’d say it hits us harder and faster than most other businesses. And that brings me to my point. CitySquares has been hit by all this. Sales are down as small businesses were reacting to the news in September and October, and as they refocused their energies and also smartened up. Sales are down, cash flow is down, some of our customers have gone under, some have been unable to pay their bills. Nevertheless, we’re seeing our way through this. We have an amazing tribe here at CitySquares – some extremely dedicated and passionate people. These qualities were demonstrated this week when I asked everyone to take a pay cut. The result? Some people took bigger pay cuts than they were asked to! And another thing – everyone stayed. Attitudes are great, everyone is as committed as ever. It’s just amazing to me.

I learned so much this week, as a CEO and as a Founder. I learned about employee psychology, I learned about my own abilities as a leader, as a CEO, as a founder. I learned even more about buy-in, about the difference between a decision and a choice.

So, CitySquares underwent pay cuts this week and I can honestly say that on this blog with pride, and with my head held high. Because I know that our team is prepared to do what it takes to weather this storm. Because they understand that paycuts for everyone means no one gets let go, everyone stays. And this tribe is aware of the same goal we’ve had for the past two years – the goal that’s now within 5-6 months from happening – the goal of cash flow positivity. The only way we can make that happen is if everybody here is on the same page, and that has not changed. Everyone here must work towards the same goal! Cash flow breakeven, in this market? In this economy? Outstanding! Show me a business that’s within 12 months of cash flow positivity, and I’ll show you a business that gets it. But show me a business that’s not making changes, not making the necessary cost reductions, not doing everything to ramp revenues and I’ll show you a business that’s in a lot of trouble.

Another thing, we wouldn’t even be here talking about this right, nor ever even arrived at this moment in time, if it weren’t for our investors, our angel investors from eCoast Angel Network and other outside investors like Jonathan Kraft, Mark Cuban, even my own father, among several others. We’re truly fortunate to have such fantastic individuals behind this company. Angel investors are special and its easy to forget how important they are to the economy, to the capital systems, and to the world of entrepreneurship. Angels make it happen.

So, there you have it folks. The truth as bare as it comes! And that’s what my blog entry from earlier this week was about – the difference between decisions and choices. Decisions I had to make, and choices that I had to give to the staff. There were difficult, very difficult, decisions that I had to make, along with our board of directors. These decisions lead to other decisions, and choices, for the tribe – and this week they all chose to help each other, to make the necessary personal investment, to protect each other.

Monday was one of the hardest days I’ve ever had at CitySquares. Today is one my proudest.

A choice is not the same as a decision. The two are very different. A choice implies you have options, and doesn’t have a sense of conviction. A decision, on the other hand, is very much a choice with conviction. Should I have the vanilla or the chocolate? That’s a choice, but not one of conviction, I don’t suppose. Voting for Obama was a decision, a big one, and one that carried with it some strong convictions.

Today was a very difficult day for me, as founder and as CEO of CitySquares. In fact, today was one of the hardest days I’ve ever had at CitySquares because it was the culmination of some very hard decisions, decisions that affected everyone, yet that also protected everyone. These decisions challenged me in the roles of CEO and founder. Wow, how different they really are. Recently I’ve been wrestling with this for the first time. I never saw it coming.

You might suggest that the CEO says, “I look out for the bottom line” and the founder says, “I look out for the company.” The two are not the same!

As founder, I have a big vision, a huge amount of passion for this, and I’m insanely optimistic. These things can blind me. And as someone reminded me today, “that’s really your job, Ben. No one else can do it” These things are essential.

As a CEO I have to execute on the vision, harness the passion, funnel the optimism. These things, too, are essential.

Today I found myself caught in a limbo between Founder and CEO. The founder in me wants to protect everyone, make them believe that the world is a good place, that everything is going to be just fine, and shelter them from the debris and the noise and the dust being kicked up all around us. The CEO in me wants to tell it like it is and let them face these decisions on their own, and test their commitment to the company, test their will, and test the guts and passion that we asked for when we hired them.

And therein lies the point: when the going gets tough who are you? Who are you really concerned about? Who do you look out for? Do you take one for the team or do you just move forward with your own agenda.

I posted a tweet earlier this evening about today, and I was totally taken aback by the responses I got from folks. People near and far wrote me privately either through twitter or through facebook to ask if I wanted to talk about it, just to talk, founder-to-founder, or as friends. I have to say, that, in itself, meant so much to me. It reminded me how being a founder is lonely. But it’s times like these that your tested, yet again.

Choices are easy, decisions are hard. I know I made the right decisions, and doing so resulted in more choices for others. That’s a pretty powerful thing. Now you just have to hope that it all works out.

Seth Godin posted a nice little piece today, as he frequently does, about passion and expertise in whatever you do. Very timely, as I’ve been facing this very question in the past few weeks.

CitySquares has a tribe member who’s been with us for about a year now. She’s a rock star in so many ways. She also really enjoys her job and is proud to work at CitySquares. This is partly what makes her a true member of the tribe.

For the last year she has filled some big shoes, and performed in a job that was not well defined for her. She kicked ass at it, like I never thought possible. And over the course of time she’s naturally filled a role within the company that not only has been a bit of a vacancy within the organization, but is something she’s simply really good at.

No one asked her to do these things, no one pointed her in that direction. Instead, she saw a need in the company, and then filled that need. She’s done so with poise, enthusiasm, with total ease. Today, she was formally moved into that role.

What she did over the course of time, perhaps unknowingly, is what she’s good at, and what she enjoys – voluntarily – on her own. She did so because she has a natural expertise with it, and because she has a passion for it. You just can’t buy that. The result, and hopefully the result of good observation by management, is a permanent move into that role. This will result in even better performance in this role, it addresses a need within the company, in a happier, more efficient, effective successful company, it results in happier customers and better retention rates, and best of all – a member of the tribe who’s even happier and more successful.